Technical Check: Here is why this post Budget 2022 pick from housing finance space could double this year!

GIC Housing Finance Ltd share price has risen 30 per cent in last one year compared to over 50 per cent upside seen in the S&P BSE Smallcap index in the same period. Experts, however, feel that the recent price action suggests fresh 52-week highs in next 6 months.

The smallcap stock with a market capitalization of less than Rs 1000 cr hit a 52-week high of Rs 202.50 on the BSE in August 2021, and then the trend shifted sideways.

The stock rallied more than 8 per cent in the last 1 week, and over 6 per cent on the monthly chart, which hints at bullish bias. The stock is trading well above short- and long-term moving averages such as 30,50,100 and 200-DMA.

The recent price action helped the stock to climb above crucial moving averages which opened-up room for a possible target of Rs 300. This, in turn, translates into an upside of about 89 per cent from Rs 159 recorded on 3 February, suggest experts.

The primary business of GIC Housing is granting housing loans to individuals and to persons/entities engaged in the construction of houses/flats for residential purposes.

Budget 2022 also offered some incentives to housing finance companies which should support the upward move. For FY23, the Finance Minister has allocated Rs 48,000 Cr for the PM Housing scheme.

In FY23, 80 lakh houses will be completed for the identified eligible beneficiaries of PM Awas Yojana, both rural and urban. The Central Government will work with the state governments for a reduction of time required for all land and construction-related approvals, for promoting affordable housing for the middle class and Economically Weaker Sections in urban areas.

“This will have a positive impact on the housing finance companies, especially catering to the lower-income,” HDFC Securities said in a report.

GIC Housing Finance is a good buy on dips stock for a possible move towards Rs 300, suggest experts. The stock bounced back sharply after it slipped below 100 back in March 2020.

The stock price started its down move from 623 (June 2017) to 52 (March 2020), making a series of Lower Tops & Lower Bottoms.

“During the move, the stock continuously traded below averages and Super trend was in Negative mode. Value buying followed and the stock made a high of 203 in Aug 2021, forming a series of higher bottom formations. The super trend turned positive,” Bharat Gala, President - Technical Research, Ventura Securities Ltd, said.

From Aug 2021 to Jan 2022 most of the time the stock traded in a range of (130-170 area). A weekly Bullish candle, supported by volumes has been formed.

“The KST & ROC Indicators have generated a Primary buy signal. A Probability of pattern breakout is high. The possible targets are 300,” said Gala.

He further added that if the stock price corrects downwards the buy levels are ((159-154)-149-(146-143). A stop loss to be observed in the trade is 124.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)